Corporate Outlook

The following forecast is based on the current business development and our internal planning. The planned acquisition of Monsanto is not yet included in this forecast and is dealt with separately below.

Our forecast is based on the exchange rates as of December 31, 2017. To enhance the comparability of operating performance, the forecasts are also adjusted for currency effects1. A 1% appreciation (depreciation) of the euro against all other currencies would decrease (increase) sales on an annual basis by some €250 million and EBITDA before special items by about €70 million.

For 2018, we expect sales of around €35 billion. This corresponds to a low-to mid-single-digit percentage increase on a currency- and portfolio-adjusted basis. EBITDA before special items is expected to match the prior-year level (currency-adjusted: increase by a mid-single-digit percentage). Core earnings per share from continuing operationsContinuing operationsSales and earnings reporting for continuing operations pertains only to business operations that are expected to remain in the company’s portfolio for the foreseeable future; opposite of discontinued operations. are expected to come in at the prior-year level (currency-adjusted: increase by a mid-single-digit percentage).

Forecast for Key Financial Data of the Group for 2018

Closing rates on Dec. 31, 2017

Currency-adjusted

Sales

Prior-year level

Increase by a low- to mid-single-digit percentage

Development of EBITDA before special items

Prior-year level

Increase by a mid-single-digit percentage

Development of core earnings per share

Prior-year level

Increase by a mid-single-digit percentage

Sales and earnings forecast by segment

For Pharmaceuticals, we plan to generate sales of more than €16.5 billion, taking into account product supply constraints out of the Leverkusen Supply Center. This corresponds to a low-single-digit percentage increase on a currency- and portfolio-adjusted basis. We aim to raise sales of our key growth products Xarelto™, Eylea™, Stivarga™, Xofigo™ and Adempas™ towards €7 billion. We expect EBITDA before special items to decline by a low-single-digit percentage (currency-adjusted: increase by a low-single-digit percentage), and anticipate a slight decline in the EBITDA margin before special items.

In the Consumer Health segment, we expect sales of more than €5.5 billion, which would be at the prior-year level on a currency- and portfolio adjusted basis. We expect EBITDA before special items to decline by a low-single-digit percentage (currency-adjusted: increase by a low-single-digit percentage).

For Crop Science, we see sales coming in at more than €9.5 billion. This corresponds to a mid-single-digit percentage increase on a currency- and portfolio-adjusted basis. We expect to increase EBITDA before special items by a mid- to high-single-digit percentage (currency-adjusted: mid-teens percentage increase).

In the Animal Health segment, we expect a currency- and portfolio-adjusted increase in sales by a low-single-digit percentage. We expect EBITDA before special items to decline by a mid-single-digit percentage (currency-adjusted: at the prior-year level). Both sales and EBITDA before special items are negatively impacted by revised financial reporting standards (IFRS 15).

Reconciliation: We expect sales of around €1.5 billion in 2018. We plan EBITDA before special items in the region of minus €0.2 billion.

Forecast for Other Key Data of the Group for 2018

Closing rates on Dec. 31, 2017

Special charges1

around €0.4 billion

Research and development expenses

around €4.1 billion

Capital expenditures

around €2.2 billion

of which for intangible assets

around €0.6 billion

Depreciation and amortization

around €2.2 billion

of which on intangible assets

around €1.2 billion

Financial result

around minus €1 billion

Effective tax rate

20.0%

Net financial debt2

Net liquidity position

1 Mainly comprising costs in connection with the planned acquisition of Monsanto until closing, restructuring measures and efficiency improvement programs

2 Excluding capital and portfolio measures

Outlook including Monsanto

Through the expected acquisition in the second quarter of 2018, we anticipate a significant increase in sales and EBITDA before special items. Based on current assumptions about the equity and financing measures to be undertaken, we expect a moderate decline in core earnings per share. For the first full year following the acquisition, we continue to expect a significant increase in sales and EBITDA before special items, and an increase in core earnings per share.

Outlook for Bayer AG

For Bayer AG we expect sales of approximately €15 billion and EBIT in the region of minus €1.5 billion. Bayer AG comprises both its own operational business and that assumed from Bayer Pharma AG and Bayer CropScience AG through business leases. In addition, the earnings of most major Bayer subsidiaries in Germany are transferred directly to Bayer AG under profit and loss transfer agreements. Also, specific intra-company dividend measures ensure the availability of sufficient distributable income. On account of the interdependencies between Bayer AG and its subsidiaries, the outlook for the Bayer Group thus largely also reflects the expectations for Bayer AG. In the coming year, based on these factors, we expect Bayer AG to report a distributable profit that will again enable our stockholders to adequately participate in the Bayer Group’s earnings.

Cautionary Statement Regarding Forward-Looking Information

Certain statements contained in this Annual Report may constitute “forward-looking statements.” Actual results could differ materially from those projected or forecast in the forward- looking statements. The factors that could cause actual results to differ materially include the following: uncertainties as to the timing of the transaction; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the merger within the expected time frames or at all and to successfully integrate Monsanto’s operations into those of Bayer; such integration may be more difficult, time-consuming or costly than expected; revenues following the transaction may be lower than expected; operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) may be greater than expected following the announcement of the transaction; the retention of certain key employees at Monsanto; risks associated with the disruption of management’s attention from ongoing business operations due to the transaction; the conditions to the completion of the transaction may not be satisfied, or the regulatory approvals required for the transaction may not be obtained on the terms expected or on the anticipated schedule; the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatments of the merger; the impact of the refinancing of the loans taken out for the transaction, the impact of indebtedness incurred by Bayer in connection with the transaction and the potential impact on the rating of indebtedness of Bayer; the effects of the business combination of Bayer and Monsanto, including the combined company’s future financial condition, operating results, strategy and plans; other factors detailed in Monsanto’s Annual Report on Form 10-K filed with the SEC for the fiscal year ended August 31, 2017 and Monsanto’s other filings with the SEC, which are available at http://www.sec.gov and on Monsanto’s website at www.monsanto.com; and other factors discussed in Bayer’s public reports which are available on the Bayer website at www.bayer.com. Bayer and Monsanto assume no obligation to update the information in this communication, except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date.